I'm More Convinced Than Ever: UConn & UVA to the B1G

[BC1978]

There is little debate about the enforcement of the Grant of Rights. (Almost) everyone agrees that GoRs are enforceable where one entity leases its rights to a media partner on behalf of the conference. The concept itself has been around a long time and has always been enforceable when both parties are upholding their end of the bargain.

However, the reason there's debate is because the conferences have made a distinct forfeiture clause, separate from the Grant of Rights, trying to invalidate compensation for the rights (which was done since the Grant of Rights was not executed to protect the conference, rather as a condition of execution with the TV partners). In the recitals, from the Amended and Restated Grant of Rights Agreement, this is confirmed where it states:



The enforcement of the GoR is really not up for debate. If a league member where to leave and the conference would continue paying for the rights as happens in every other walk of life that uses a GoR, it would be difficult to get out of. The only reason this is an issue is because unlike the music industry and publishing industry, these conferences are going to attempt to skirt actually paying for the rights they're being granted by member schools if they leave, despite still getting money from the media partners. The reason, of course, is because the conferences know that if the GoR was operating as normal, it would not do anything to stop schools from leaving since that isn't the purpose of the document. So it's really not the Grant of Rights that would be challenged, but rather the forfeiture clauses and whether they would be in breach of the GoR itself.

Understand your points, Kyle. But here is my question. I would assume the forfeiture clause is in all of the GORs. If so, a team challenging the enforceability of this clause in one conference GOR, while at the same time intending to go to another conference and sign a GOR with a similar enforcement clause, would have a problematic issue, I think. The departing conference would claim that the departing school was not litigating in good faith (the "Clean Hands" doctrine). This question does not exist if the new conference does not have a GOR. However, if the new conference does have a GOR with this forfeiture clause, then they are essentially litigating against their own arrangements, IMO.

 

[SouthronCross]

Virginia (and Va Tech for that matter) aren't really well-represented on TV in DC. You might catch their weekly sports show or a segment on CSN, but I wouldn't say that the ACC shares the DC market with Maryland/B1G at the moment. Could change, but right now a UVa fan in DC/MD might catch 5-6 games/matches per season on the regional sport networks.

How many do Maryland fans get access to? About the same?

 

[billybud]

As another poster pointed out to you, he didn't state anything 'unequivocally.' You completely and utterly took his comments out of context. He stated they wanted Penn State to feel secure. That's a far cry from doing it "out of desperation" and it doesn't mean they weren't interested in Maryland and/or Rutgers otherwise. They were always interested. The timing may have been a factor in when they acted, but they were always interested. Alvarez's comments in no way contradict that.

Spin it...But here is what he said....unequivocal...

""Jim [Delany] felt that someday, if we didn’t have anyone else in that corridor, someday it wouldn't make sense maybe for Penn State to be in our league. That they would go into a league somewhere on the east coast."

Delaney, according to Alvarez, moved to protect Penn State...that's a wrap.

 

[billybud]

And that just happens to be supportive of what Delany was already thinking once the Pac/B1G scheduling deal didn't happen.

True believers will spin info to fit their belief set. De;laney was worried about PSU being isolated down the road and defecting...Barry Alvarez flat states that.

 

[billybud]

"Madison – The recent decisions to add Maryland and Rutgers to the Big Ten Conference were made not only to expand the footprint of the league but also to ensure Penn State wasn't poached by another league.

Wisconsin athletic director Barry Alvarez delivered that message Friday to the UW athletic board.

Alvarez lauded Big Ten commissioner Jim Delany for making the recent moves.

“Jim has tremendous vision,” Alvarez said. “He really thinks out side the box and thinks of the future. The decision to add these two will really benefit us more in the future.

“If you study the demographics and take a look at where the population is, we are in the rust belt and continue to lose population.

“That northeast corridor, all the way to the south, continues to grow…Jim felt that someday, if we didn’t have anyone else in that corridor, someday it wouldn’t make sense maybe for Penn State to be in our league.

“That they would go into a league somewhere on the east coast. By doing that, it keeps us in the northeast corridor.”

 

[billybud]

JoPa mentioned the isolation n the Big Ten some years back....and brought up Rutgers as a choice now that Pitt and Cuse were taken by the ACC...


"During his weekly press conference Tuesday, Penn State coach Joe Paterno suggested that Rutgers could potentially join the Big Ten Conference.

“I don’t know where we’re (Big Ten) going to end up,” Paterno said. “There might be even some speculation that Penn State maybe ought to get into something different or we ought to try to go out and get some people from the East to come into the Big Ten, that we maybe ought to solicit Jim Delany and some of the leaders of the Big Ten, ‘Hey, why don’t we go take a good look at Syracuse and Pitt?’

“Now that they’re out of it, ‘Why don’t we take a look at Rutgers?’ and take a look at somebody that we can bring in from the East so that the Big Ten doesn’t end in State College.”

 

[kyleslamb]

Understand your points, Kyle. But here is my question. I would assume the forfeiture clause is in all of the GORs. If so, a team challenging the enforceability of this clause in one conference GOR, while at the same time intending to go to another conference and sign a GOR with a similar enforcement clause, would have a problematic issue, I think. The departing conference would claim that the departing school was not litigating in good faith (the "Clean Hands" doctrine). This question does not exist if the new conference does not have a GOR. However, if the new conference does have a GOR with this forfeiture clause, then they are essentially litigating against their own arrangements, IMO.

The forfeiture clause isn't contained in the GoR itself. They inserted the clause in the bylaws after the GoR was signed and added to the broadcast agreement. Basically they said in so many words 'even though the GoR would otherwise entitle you to compensation, if you leave the league, you're not getting it.' The actual Grant of Rights agreement contains no forfeiture language. It's quite the opposite, in fact. It actually states the Grant of Rights is valid regardless of conference affiliation.

On a side note, although I get your point about a forfeiture clause being part of the agreement, a lot of judges have thrown out contracts where consideration wasn't adequate on both sides. In a situation like this, even if the clause were a part of the agreement, a judge could still rule such a contract to be unenforceable. But like I said, in this case, the clause isn't actually part of the GoR. It was added as a clause in the conference bylaws.

 

[kyleslamb]

True believers will spin info to fit their belief set. De;laney was worried about PSU being isolated down the road and defecting...Barry Alvarez flat states that.

Sounds like you're the one spinning. A lot of people have told you flatly that you're completely misinterpreting the comments. Your position is that somehow the Big Ten was so insecure about Notre Dame's olympic sports, they began negotiating from a position of sheer, frightened terror rather than all the other people out there that knew all along how/why the league wanted Maryland/Rutgers. It was obvious from day one. People were speculating about those two since December 2009 when realignment was first uttered by the league. Why? Because everyone being honest knew the Big Ten craved television markets. NYC and DC are about as big as it gets in the eastern half of the country.

The Big Ten did want to give Penn State some travel partners on the east coast to make them feel better about their position within the league. That was always a goal, though. The ACC adding ND's olympic sports didn't change that. It certainly didn't make them freak out as if they were doomed if they didn't add someone. But the point you're missing, and that everyone else in this thread has already agreed with is that Maryland and Rutgers were always targets regardless of Penn State. The Big Ten, flatly, wanted television markets and an East Coast presence. The Penn State stuff is just a fluffy soundbyte that you're spinning out of its context.

 

[businesslawyer]

FWIW, I am think the broader issue is that 4 of the 5 P5 conferences have GORs. Assuming they are all more or less similar and they have been developed by sophisticated parties and legal counsel, it is hard to see a challenge based on a technicality. IMO, a challenge would have to be to the basic enforceability of the GOR itself. Forgetting for a minute that a school would be essentially reputing what it had voluntarily agreed to, the bigger issue, IMO, arises if a school challenges the enforceability of a GOR while, at the same time, intending to go to another conference with a GOR.

I would think that the departing conference would raise "clean hands" objections and claim the school was not acting in good faith in disputing the premise of a GOR in one conference while intending to sign a similar GOR in a new conference.

No. That has nothing to do with the clean hands doctrine. Why do non-lawyers feel like pulling phrases out of their butts is useful legal discourse?

 

[Fishy]

No. That has nothing to do with the clean hands doctrine. Why do non-lawyers feel like pulling phrases out of their butts is useful legal discourse?

Because lawyers make it look like fun.

 

[whaler11]

Why in the hell would have Penn State leave the Big 10 for the ACC?

Hey let's leave 8 figures on the table annually!

 

[NickyNewark]

Sounds like you're the one spinning. A lot of people have told you flatly that you're completely misinterpreting the comments. Your position is that somehow the Big Ten was so insecure about Notre Dame's olympic sports, they began negotiating from a position of sheer, frightened terror rather than all the other people out there that knew all along how/why the league wanted Maryland/Rutgers. It was obvious from day one. People were speculating about those two since December 2009 when realignment was first uttered by the league. Why? Because everyone being honest knew the Big Ten craved television markets. NYC and DC are about as big as it gets in the eastern half of the country.

The Big Ten did want to give Penn State some travel partners on the east coast to make them feel better about their position within the league. That was always a goal, though. The ACC adding ND's olympic sports didn't change that. It certainly didn't make them freak out as if they were doomed if they didn't add someone. But the point you're missing, and that everyone else in this thread has already agreed with is that Maryland and Rutgers were always targets regardless of Penn State. The Big Ten, flatly, wanted television markets and an East Coast presence. The Penn State stuff is just a fluffy soundbyte that you're spinning out of its context.

He's trying to make it out that if SU or Pitt were available RU or Md wouldnt have been taken it appears to me!?!But SU NEVER fit the B1G model and Pitt due to PSU already being B1G didnt make sense....I believe Pitt and SU KNEW what was coming and jumped ship to avoid humiliation and knew the OBE would lose the NYC market therefore devaluing them!!! The ACC got the hinterlands and the B1G got the heartland!

 

[Calamitous]

If the GoR is such an impenetrable obstacle that "likely" staves off realignment, then why would the Big Ten have taken UMD/RU out of desperation for the ACC possibly poaching Penn State? They too are signed to a GoR. So why would the Big Ten fear the ACC if Penn State is under the same legal contract that supposedly makes the ACC schools out of reach?

Very good point. I remember someone on another college board asking the same exact question... and there was no good answer. The best answer was that PSU could have been looking for a new identity post-Sandusky sanctions. But even that is a huge stretch as PSU would not only lose several years to sanctions, but many many more years in revenue due to the B1G GOR.

If the ACC really did approach PSU, there had to be an out-clause in the B1G GOR. If true, I bet there is language in any GOR contract that opens to a loophole. So you're absolutely right, is the GOR really THAT safe? Many on other ACC school's boards continually talk about Texas and 3 other friends. How does the B12 GOR protect the ACC if it can't protect the B12. Of course, message boards are complete speculation and can be driven by guys like the Dude.

So I'm with you on the GOR now that you point that out. But UVa will not go anywhere without a UNC/UVa alliance-type package. Right now, UNC is still king of the ACC (not FSU believe it or not) and will make the rules. Plus Swofford is Carolina blue through and through. Until Swofford retires, UNC will be in the ACC... and so will UVa. And talk that UMCP will lure UVa is a bit far-fetched, as most (including administration) at UVa have a deep-rooted hatred to their Terp neighbors to the north.

 

[BC1978]

The forfeiture clause isn't contained in the GoR itself. They inserted the clause in the bylaws after the GoR was signed and added to the broadcast agreement. Basically they said in so many words 'even though the GoR would otherwise entitle you to compensation, if you leave the league, you're not getting it.' The actual Grant of Rights agreement contains no forfeiture language. It's quite the opposite, in fact. It actually states the Grant of Rights is valid regardless of conference affiliation.

On a side note, although I get your point about a forfeiture clause being part of the agreement, a lot of judges have thrown out contracts where consideration wasn't adequate on both sides. In a situation like this, even if the clause were a part of the agreement, a judge could still rule such a contract to be unenforceable. But like I said, in this case, the clause isn't actually part of the GoR. It was added as a clause in the conference bylaws.

Fair points. Do all the conferences with GORs also have the forfeiture clause in their bylaws? If so, then how can a team fight the forfeiture clause in the bylaws of one conference, but have no issue agreeing to the forfeiture clause in the bylaws of the new conference? That's the "clean hands" issue I referenced. It would seem that if the departing school was successful in invalidating the forfeiture clause for the departing conference, the ruling would extend likely extend to all conferences with such a provision in their bylaws. IMO, this would be a consideration that any acquiring conference would have to take into account. Would any conference want to open that can if worms? Would the departing team want to take the risk of an unsuccessful litigation?

 

[pj]

Also problematic in court would be the fact that the forfeiture clause in the bylaws would have to survive termination of the school-conference relationship. Normally a bylaws clause would not apply to a school that is not in the conference - only to conference members.

 

[Adios]

Robert E Lee was born in Virginia. C'mon.

 

[dayooper]

Fair points. Do all the conferences with GORs also have the forfeiture clause in their bylaws? If so, then how can a team fight the forfeiture clause in the bylaws of one conference, but have no issue agreeing to the forfeiture clause in the bylaws of the new conference? That's the "clean hands" issue I referenced. It would seem that if the departing school was successful in invalidating the forfeiture clause for the departing conference, the ruling would extend likely extend to all conferences with such a provision in their bylaws. IMO, this would be a consideration that any acquiring conference would have to take into account. Would any conference want to open that can if worms? Would the departing team want to take the risk of an unsuccessful litigation?

Not sure. The only other two conferences that have a GoR are the Big10 and Pac12. No one has posted their by-laws so we really don't know.

Total conjecture here, but it is my opinion that the GoR is not in place for protection in those conferences, but to package their media to get the best rates. Fox wanted to know that they could show UM/OSU/PSU/Nebraska ect. for the long haul. By keeping those rights in house, no matter what conference they are in, they would have those.

 

[kyleslamb]

Fair points. Do all the conferences with GORs also have the forfeiture clause in their bylaws? If so, then how can a team fight the forfeiture clause in the bylaws of one conference, but have no issue agreeing to the forfeiture clause in the bylaws of the new conference? That's the "clean hands" issue I referenced. It would seem that if the departing school was successful in invalidating the forfeiture clause for the departing conference, the ruling would extend likely extend to all conferences with such a provision in their bylaws. IMO, this would be a consideration that any acquiring conference would have to take into account. Would any conference want to open that can if worms? Would the departing team want to take the risk of an unsuccessful litigation?

I haven't taken the time to read through the ACC contract, but I believe it was pointed out that theirs was structured very similarly to the Big 12, so I assume their forfeiture clause is also in the bylaws rather than the media rights addendum.

I definitely don't know how it would be looked upon by a court that schools willingly changed the bylaws later, but if the valid consideration was essentially leasing media rights in exchange for payment, I'd still suggest there's a good chance withholding payment after a membership change would be considered a breach. I guess we will have to wait to find out (or maybe we won't ha ha).

 

[kyleslamb]

Also problematic in court would be the fact that the forfeiture clause in the bylaws would have to survive termination of the school-conference relationship. Normally a bylaws clause would not apply to a school that is not in the conference - only to conference members.

To me, this is the most interesting aspect. In the Big 12 Bylaws, it basically does say that once a withdrawals officially, it's no longer a member and is not subject to the bylaws. But the forfeiture clause makes it a point to say the Grant of Rights shall exist after membership.

The Grant of Rights Agreement which will remain in full force and effect as to such Withdrawing
Member and the Withdrawing Member shall continue to be fully bound under the Grant
of Rights Agreement after Withdrawal for the remainder of the term of any Grant of
Rights Agreement as if it remained a Member of the Conference, but the Withdrawing
Member shall not be entitled to payment of any amounts or any other benefits arising
under the Grant of Rights Agreement after Withdrawal.

[emphasis mine]

To me, this is a de Facto admission that the consideration in the Grant of Rights, though not explicitly stated, is indeed payment for media rights (which makes sense since that's how every conference is structured).

I still maintain this is going to be a case of conflicting documents. On one hand, you have a document that says it will remain in full force regardless of conference membership and the entity is bound to continue granting its rights to the other. On the other hand, you have a separate document that acknowledges you no longer are bound by the league bylaws if you leave, but if you do leave, the other contract is void to you even though you have to keep honoring it.

Truly, I don't see, when push comes to shove, how any contract will continue to be legally enforceable when one party gets to continue enjoying the benefits of another and the other party does not continue getting compensated for it. If a publisher has the rights to a singer's album, and a 3-album deal is in effect with the singer using an option to go to another publisher, the former publisher can't just stop paying royalties to the first album(s) that were published. They have to continue honoring the royalties in exchange for the works.

Fair to say that no one knows for sure how some judges/juries will rule. I'll acknowledge that. But one party getting to keep profiting from rights and not having to pay for them? I'll believe that if/when I actually see it.

 

[billybud]

Just ask Sir Paul McCartney about media rights being signed away....No Beatle has received royalty or licensee money from their huge songbook of pre-1980 songs.

They signed that away back when they were practically kids. Sir Paul did attempt to buy back those rights almost 30 years ago but was outbid by Michael Jackson...Sony now owns the rights and receives the royalty and licensing fees.

The ACC GOR has each school signing away specified (in ESPN contract) media rights, for a specified period, to the conference. I suppose a school could choose not to play sports...but if they did play, the ACC would own the rights (Tier 1, 2, and 3) as specified in the ESPN contract.

 

[CTMike]

Just ask Sir Paul McCartney about media rights being signed away....No Beatle has received royalty or licensee money from their huge songbook of pre-1980 songs.

They signed that away back when they were practically kids. Sir Paul did attempt to buy back those rights almost 30 years ago but was outbid by Michael Jackson...Sony now owns the rights and receives the royalty and licensing fees.

The ACC GOR has each school signing away specified (in ESPN contract) media rights, for a specified period, to the conference. I suppose a school could choose not to play sports...but if they did play, the ACC would own the rights (Tier 1, 2, and 3) as specified in the ESPN contract.

But they got paid for those rights. Probably peanuts, but paid nonetheless. Fairness aside, they produced a product and sold it.

The teams in a GOR have neither produced a product (yet) nor been paid for it. On top of that the GOR threatens that the teams won't get paid even after playing the games.

 

[upstater]

Spin it...But here is what he said....unequivocal...

""Jim [Delany] felt that someday, if we didn’t have anyone else in that corridor, someday it wouldn't make sense maybe for Penn State to be in our league. That they would go into a league somewhere on the east coast."

Delaney, according to Alvarez, moved to protect Penn State...that's a wrap.

And how do you get from there to what you said?

If the ACC locks up the east coast and raises per year payouts to $40m, then "MAYBE" PSU looks to the ACC.

That makes sense.

But you made it sound entirely different.

 

[clmssun]

When Jim Delany dissolves the B1G Grant of Rights, we'll know he views Grants of Rights as unenforceable and/or unnecessary.

 

[upstater]

JoPa mentioned the isolation n the Big Ten some years back....and brought up Rutgers as a choice now that Pitt and Cuse were taken by the ACC...

"During his weekly press conference Tuesday, Penn State coach Joe Paterno suggested that Rutgers could potentially join the Big Ten Conference.

“I don’t know where we’re (Big Ten) going to end up,” Paterno said. “There might be even some speculation that Penn State maybe ought to get into something different or we ought to try to go out and get some people from the East to come into the Big Ten, that we maybe ought to solicit Jim Delany and some of the leaders of the Big Ten, ‘Hey, why don’t we go take a good look at Syracuse and Pitt?’

“Now that they’re out of it, ‘Why don’t we take a look at Rutgers?’ and take a look at somebody that we can bring in from the East so that the Big Ten doesn’t end in State College.”

You are taking this completely out of context.

Back when PSU fans were incensed about crazy ref calls against them (like the too-much cheering unsportsmanlike conduct penalty against fans late in the 4th qtr. of a game against Michigan), the fanbase was making loud noises about getting the hell out of the B1G. Heck, sue Paterno put a noose of a ref on her front door. When the idea of leaving the B1G was broached to Paterno, it was not only summarily dismissed as crazy nonsense, but it was met with a loud guffaw. The very idea was laughable.

Now, I grant you, that if ACC locked up the East Coast and paid its members $40m, and say another 15 years from now, PSU might easily look at the ACC.

 

[Cleanface]

Now, I grant you, that if ACC locked up the East Coast and paid its members $40m, and say another 15 years from now, PSU might easily look at the ACC.

Nah man, naaah.

First, the ACC can never 'lock up' the east coast. The B1G now has MD and RUTG, and PSU, the largest FBall 'brand' in the east that has already been a member for 20+ yrs. The B1G flag has been planted on the EC and it will never be broached. All it takes to seal the deal is UCONN, but the deal is somewhat already sealed.

By that time, 15 yrs into the future, it will be almost 40 years since PSU became a member, and B1G payouts will probably be about $500B per school per year.

PSU will never leave, for any reason, ever.